Tag: CRIF High Mark

India’s lending market doubles in last five years on personal loans boom, BFSI News, ET BFSI

Personal Finance

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India’s loan market has doubled in the last five years — fiscal 2017 to 2021 — to Rs 156.9 lakh crore, according to a report.

“Over the last five years, retail, microlending and commercial lending portfolios have witnessed an increase by 91%, 157% and 93%, respectively. Retail and commercial lending contribute 49% each to total lending in India and microfinance contributes to 2% of the overall lending pie,” CRIF High Mark, a credit bureau, said its How India Lends, FY 2021 report.

The loan matrix

The overall personal loans portfolio witnessed 2.3X growth in originations by value and 3.8X by volume from FY17 to FY21 while the same for small-ticket personal Loans is 3X growth in originations by value and 11.5X by volume, it said

Credit Cards witnessed 2.4X growth in New Card originations from FY17 to FY20 followed by a drop in FY21.

Auto loans

Two-wheeler loan books saw 1.8X growth in originations by value and 1.2X growth in originations by volume.

Auto loans portfolios recorded 23% growth in originations by value from FY17 to FY19 followed by a de-growth in FY20 and FY21.

For the same period, home loans portfolio observed 32% growth in originations by value and 15% growth. Affordable Home loans grew by 17% in originations by value and 6% by volume

Business loans witnessed 17% growth in originations by value from FY17 to FY20, followed by almost 2X Y-o-Y growth in originations by volume from FY20 to FY21.

Navin Chandani, MD & CEO, CRIF High Mark, said, “Our report, How India Lends – FY21, is an attempt to highlight the credit trends in India, from FY17 to FY21. Lending Institutions and the policymakers could benefit from the report and collaborate to promote a favourable lending environment. As the development of credit spurs economic growth, we are committed to study and publish reports that will benefit the lending ecosystem.



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Dec quarter saw rise in home loan delinquencies: CRIF High Mark

Personal Finance

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CRIF High Mark, however, mentioned that active housing loan borrower base has witnessed a growth during the December quarter.

Credit bureau CRIF High Mark, in its quarterly report, on Wednesday said that delinquencies in the housing loan book of banks as well as NBFCs increased during the third quarter of the last financial year (Q3FY21). The report said that delinquencies in the housing loan book increased 23 basis points (bps) year-on-year (y-o-y) to 2.49%. These are the accounts where instalments were due for more than 90 days (90+ DPD). The report from the credit bureau comes at a time when lenders are likely to face more stress in their loan book due to second wave of Covid-19.

The highest stress was seen in the small ticket housing loans below Rs 5 lakh. While housing finance companies (HFCs) faced 7.84% delinquencies, public sector banks saw 6.3% loans under stress during Q3FY21. Similarly, private banks were dealing with 5.28% delinquencies in the same period. The credit bureau also analysed delinquencies based on locations. The housing loan delinquencies of borrowers in the metro cities rose 21 bps y-o-y to 2.4%. However, in tier 2 cities delinquencies dipped 33 bps y-o-y to 3.27%.

CRIF High Mark, however, mentioned that active housing loan borrower base has witnessed a growth during the December quarter. The active housing loan borrower base as of December 2020 registered a 5% growth, compared to pre-pandemic levels of December 2019. The third quarter of last fiscal (Q3FY21) witnessed 28% quarter-on-quarter growth in disbursements compared to 6% growth in the same period in 2019-20.

Vipul Jain, head of products, CRIF High Mark, said: “Almost 50% of all loans sourced in the year was in the last three months of 2020.” Affordable Housing (loans up to Rs 35 lakh) contributed to 82% of sourcing volumes with growth driven by Tier II and Tier III cities, he added.

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‘Active home loan borrower base grew 5% by December 2020 from year ago’

Banking & Finance

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With rising demand for home loans, the country’s active housing loan borrower base as of December 2020 was higher than the pre-pandemic levels of December 2019, with growth of nearly five per cent.

According to the CRIF CreditScape: Housing Loans report, the total number of housing loan borrowers was 2.32 crore as on December 2020, of which 1.43 crore were active borrowers. In contrast, the total home loan borrowers as on December 2019 was 2.16 crore, of which 1.36 crore were active borrowers.

“The housing loan sector, after witnessing a setback in the first quarter of 2020-21 in terms of originations, bounced back in the second and third quarter of 2020-21, ending the year with 9.6 per cent growth in portfolio outstanding compared to 10.4 per cent growth in the previous year,” said the report.

 

The third quarter of last fiscal witnessed 28 per cent quarter-on-quarter growth in disbursements compared to six per cent growth in the same period in 2019-20.

 

Vipul Jain, Head of Products, CRIF High Mark, said housing loans sourcing witnessed strong growth in the third and fourth quarter of 2020.

 

“Almost 50 per cent of all loans sourced in the year were in the last three months of 2020. Pent-up demand, lower interest rates, favourable government incentives and discounts from developers, helped in the sector’s growth,” he said.

Affordable housing with loans up to Rs 35 lakh contributed to 82 per cent of sourcing volumes, with growth driven by Tier-II and Tier-III cities.

 

The report also revealed that Mumbai, Delhi NCR and Bengaluru are the top three housing loan markets even though Mumbai and Delhi displayed high delinquencies as of December 2020.

“Tier-II and III geographies have a higher annual growth rate in the housing loan book compared to the metros, with a large part of the growth coming in from the affordable and mid-market segment,” it further said.

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Crif report: Bengal, Assam, Odisha confront repayment stress in microloans

Personal Finance

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States like West Bengal, Assam, Odisha and Maharashtra were facing maximum re-payment stress, according to credit bureau CRIF High Mark.

The early delinquencies rate in microloans remained 6% higher than the pre-pandemic level during the third quarter of this fiscal, although it improved by over 7% from the second quarter. States like West Bengal, Assam, Odisha and Maharashtra were facing maximum re-payment stress, according to credit bureau CRIF High Mark.

Releasing the Microlend Report, a quarterly update on the microfinance lending landscape in India, on Thursday, CRIF said, “High re-payment stress has continued from the previous quarter with PAR (portfolio at risk) 31-180 reaching 12.7%, having maximum stress in West Bengal, Assam, Odisha and Maharashtra.”

The report said early delinquencies by value (PAR 1-30 DPD) reduced by 7.4% coming into December 2020. NBFC-MFIs, banks and small finance banks (SFBs) witnessed greater early repayment stress in rural markets compared to urban.

“Eastern states of Assam and West Bengal witnessed very high stress with PAR 31-180 DPD reaching 23.1% and 22.8%, respectively coming into December 2020. PAR 180+ stood higher for Assam (7.9%) and Maharashtra (7.6%) compared to other states as of December 2020,” CRIF observed.

West Bengal and Assam, hit by the dual impact of the pandemic and natural calamities, have witnessed maximum repayments stress as of Q3FY21. The Assam Microfinance Institutions (Regulation of Money Lending) Bill, 2020 has been introduced to regulate operations of microfinance institutions (MFIs) and ease stress in the sector.

Notably, collection efficiencies for microfinance players fell sharply in Assam in January after passing of the Bill by the state Assembly in December last year and talks of a possible waiver of microloans ahead of the state elections. Around 47% of banks’ MFI portfolio is concentrated in eastern region, followed by 14% in south and 12.5% in west, CRIF added.

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Report, BFSI News, ET BFSI

Banking & Finance

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More women have resorted to unsecured personal loan borrowings rather than home loans or auto loans during the pandemic, a report said on Thursday. Personal loans, which are typically consumption loans borrowed without any security to meet expenses, have witnessed a 23 per cent year-on-year rise in the number of women borrowers in the first nine months of 2020-21 (FY21) till December, as against a 5 per cent growth in Home Loans segment, the report by CRIF High Mark, a credit information company, said.

The COVID-19 pandemic resulted in deeper financial issues in some households as the pandemic and the resultant lockdowns hurt financially.

The active loans to women borrowers stood at 6,482 in the personal loan segment, as against 4,354 home loans, while auto loans witnessed a 4 per cent de-growth to 1,818 women borrowers, the report released in the run-up to the women’s day said.

Women’s share in the overall personal loan and auto loan pie has increased by one percentage point to 16 per cent now, the report said, adding they constitute 29 per cent of the home loans market.

The company data said average ticket size of personal loans borrowed by men and women has reduced by 10 per cent and 5 per cent, respectively, over the past one year.

The average size of loan borrowed by women continues to be smaller than that borrowed by men, while the average auto loan size borrowed by women is 8 per cent higher than that borrowed by men.

The share of top five states in the personal loan portfolio outstanding for women has increased by 18 per cent over the previous year, and women borrowers from southern states have higher credit book size as compared to western and northern states, it said.

A total of 1.8 crore loans – split into 18 lakh auto loans, 15 lakh home loans and 1.5 crore personal loans – were given out in the first three quarters of 2020-21, it said, adding that this was 40 per cent lower than the 2.97 crore in the year-ago period.

In terms of the value of loans disbursed to women borrowers, public sector banks have had the largest share observed over the past four quarters, followed by NBFCs and private banks, it said.

Maximum loans are given to women in the age group 26-35 having a share of 40 per cent in the overall disbursements in the year 2020, it said, adding that 6.26 crore women borrowers have a credit history as of now.



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